You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent, –10 percent, 19 percent, 18 percent, and 10 percent.
a. What was the arithmetic average return on the company’s stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)
Average Return = ?
b-1. What was the variance of the company’s returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.)
Variance = ?
b-2. What was the standard deviation of the company’s returns over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Standard Deviation = ?
1.
=(11%-10%+19%+18%+10%)/5=9.60%
2.
=((11%-9.60%)^2+(-10%-9.60%)^2+(19%-9.60%)^2+(18%-9.60%)^2+(10%-9.60%)^2)/sqrt(5-1)
=0.02726
3.
=sqrt(0.02726)=16.51%
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